Waco Airbnb Rules & Investment Guide

Potentially, but the STR category, zoning district, distance limits, parking, licensing, and complete operating costs control the address-level decision.

• Confirm that the address is inside Waco city limits. An AirDNA market label can include properties governed by another city or unincorporated McLennan County.
• Classify the operation before evaluating zoning. Waco regulates five categories covering hosted rentals, non-hosted single-family or duplex rentals, and non-hosted multifamily rentals.
• A current license does not guarantee transferability to a buyer. Ordinance changes can prevent a new owner from qualifying for the same license or special permit.
• Underwrite the current license, inspection, possible special-permit, parking, hotel-tax, insurance, operating, and long-term-rental costs for the exact property.

Waco requires the correct STR category and allows each category only in specified zoning districts.

• A Bed and Breakfast Homestay Establishment requires the owner on site, permits up to five guest rooms, and may serve multiple groups. A Bed and Breakfast Inn requires a resident manager and permits up to 15 guest rooms.
• STR Type I serves one group while the owner or designated operator stays on site. STR Type II covers a non-hosted single-family or duplex property serving one group. STR Type III covers a non-hosted unit in a property with three or more units.
• BBHE and STR Type I operations in R-E, R-1A, R-1B, and R-1C require a special permit. Certain B&B Inns also require one based on zoning.
• Waco states that Type II is no longer allowed by special permit in R-E, R-1A, R-1B, or R-1C, and Type III is no longer allowed by special permit in several residential and office districts.

Every Waco STR needs a license, and some category and zoning combinations need City Council approval first.

• Apply through Citizen Self Service with a site plan showing the property, required parking dimensions, and access. Include hotel-tax payment records if the property is already operating.
• The application must document compliance with license rules, including applicable distance, density, parking, and approved special-permit requirements.
• A special permit requires Plan Commission and City Council approval plus notice to property owners within 200 feet. Waco estimates 60 to 90 days for that process.
• A license remains valid for two years and may be renewed with the renewal fee and proof that City and County hotel occupancy taxes are paid.

An STR must pass a life safety inspection before Waco issues the license.

• A certificate of occupancy issued by Inspection Services within the prior 12 months may substitute for the inspection, but sleeping-area evacuation plans are still required.
• The current Planning fee schedule lists a $75 license inspection fee. Staff schedules the inspection after application review and payment.
• Each sleeping area needs an evacuation plan. The unit must display the City-provided common-area sign with operator contact information, license number, occupancy limit, and parking requirements.
• Marketing materials and online listings must prominently display the assigned license number and occupancy limit.

Current City fees and a combined 15% hotel occupancy tax belong in the operating budget.

• The current Planning fee schedule lists a $500 license fee, $75 license inspection, $250 renewal, $250 non-compliance renewal, and $500 non-compliance fee. A special-permit application is $500 when required.
• The combined hotel occupancy tax is 15%: 7% City of Waco, 6% State of Texas, and 2% McLennan County.
• City and County hotel taxes are filed through Neumo, formerly Avenu Insights. Reports and payments are due on the twentieth day of each month. State hotel tax is remitted separately to the Texas Comptroller.
• Operating without a license does not eliminate hotel-tax responsibility. Keep exemption forms, booking records, returns, and payment confirmations for possible audits and renewal review.

The license sets operating limits, while the ordinance establishes occupancy, parking, noise, and local-response requirements.

• Maximum adult occupancy is two adults per bedroom plus two adults per rental unit. In R-E, R-1A, R-1B, and R-1C, BBHE, Type I, and Type II rentals may not exceed four unrelated individuals.
• Guests may not park on the street. Most STRs need at least one off-street space per rented room, while Type I, B&B Inn, and BBHE properties need two base spaces plus one per rented room. C-4 properties are exempt from the STR parking rule.
• A license holder who does not live in McLennan County must appoint a designated operator who lives in the County and remains present in the County and available whenever the STR is in use.
• STRs must follow City noise rules. Events open to non-guests or held for compensation are restricted to zoning districts that allow those uses.

Distance, multifamily density, enforcement, and appeal rules can block or interrupt operation.

• In R-E, R-1A, R-1B, R-1C, and R-2, a BBHE or Type II STR generally may not be within 500 feet of another licensed BBHE or Type II STR.
• Type III properties generally may operate no more than five STR units, subject to a narrow exemption for qualifying individually owned units in C-4 within the Downtown District Overlay.
• Development Services may deny, suspend, or revoke a license. An appeal must be submitted in writing to the City Secretary within 15 days after receipt of the decision.
• The STR must stop operating during the appeal. The City Council schedules and decides the appeal under the ordinance timetable.

Model the specific licensed use instead of unsupported citywide performance averages.

• Confirm city limits, zoning, category, special-permit need, 500-foot spacing, multifamily density, lawful bedrooms, parking, life-safety work, private restrictions, and transfer risk before closing.
• Budget current City fees, possible special-permit costs, the 15% combined hotel tax, insurance, platform charges, utilities, cleaning, maintenance, reserves, and local-operator coverage.
• Use property-specific comparable bookings with a stated measurement period. Stress-test lower occupancy and nightly rates, tax collection gaps, license delays, inspection work, and a long-term-rental fallback.
• Do not treat unsupported revenue, ADR, occupancy, ROI, appreciation, neighborhood, or payback estimates as evidence that a Waco property is legal or financially viable.

Route licensing, zoning, inspections, taxes, complaints, appeals, and property planning to the responsible office.

• Licensing, zoning, special permits, renewal, and inspections: Waco Planning Services at planning@wacotx.gov or 254-750-5650. Applications use Citizen Self Service.
• Zoning lookup and application questions: Development Services at 254-750-5612 and the Waco zoning map.
• City and County hotel tax: Neumo support at 877-693-4435 and the online hotel-tax system.
• Texas hotel tax: Texas Comptroller at 800-252-1385 and the state hotel-tax portal.
• Complaints and code enforcement: Waco Code Compliance at 311code@wacotx.gov or 254-750-5970. Service requests use the MyWaco portal.
• License appeals: City Secretary Michelle Hicks at mhicks@wacotx.gov or 254-750-5750.
• Property selection and setup: plan a Waco property strategy call. The City of Waco remains the authority for legal eligibility and permit approval.

Official City and state sources were checked on September 28, 2026.

• Waco Planning Short Term Rentals for categories, licensing, special permits, inspections, distance, parking, occupancy, operations, taxes, and appeals.
• Waco Code Chapter 13, Article XIII for codified STR licensing and operating rules.
• Waco Planning Services fee schedule and contact directory.
• Waco Hotel Occupancy Taxes for City, County, and state rates, filing dates, penalties, and Neumo filing.
• Texas Comptroller hotel occupancy tax guidance.
• Waco Code Compliance contacts and the City Secretary contact directory.